Saturday, December 26, 2009

This is an article in a series called The Filmmaker's Roadmap to Value. You may read all the articles in this series by clicking here.

A ROTATING FILM TOURA pet peeve of mine is those who criticize but offer no viable alternative. Here goes:

Using my previous example, the Tower Theatre could thrive if it adapted to the changing market's needs. Art house film owners should be rethinking what scarce goods only they can offer, things which other theatres can't or won't offer. Taking a cue from Jon Reiss, art house film owners could make their movies more event-based. Let's look at that in more detail.

Imagine if 50 art house theaters across the nation held a kind of "rotating filmmaker Q&A tour"? Pair up two filmmakers, one famous with someone not so famous and double bill those movies. Play that double-bill for a whole week at an art house theatre and the filmmakers show up after the show for a Q&A a few days of the week (Saturday & Sunday?). 50 weeks long, 50 art house cineplexes, 100 films, 100 filmmakers. Filmmakers talk about their movie with local audiences, sign autographs, sell DVDs, merchandise, etc. It brings much needed business to all 50 art house theatres and offers the filmmakers a chance to sell merchandise and help build awareness about their movies. Now that's a model for sustainability! As a consumer, I can tell you that whatever "urgent" plans I have going on, I'll find day care and scramble to the Tower Theatre to hob nob with visiting indie film directors.

This is all about giving a consumer a good reason to buy. It's about creating value. You don't lure customers into your store because you appeal to their pity, because 'your store has been in the same location for 20 years and it would be such a shame to see you go out of business.' You lure customers in your store by offering them something they can't resist, something only you can provide. And, whenever possible, you make sure it's a scarce good they have to pay good money for.

Trent Reznor has successfully made that strategic shift—he doesn't sell CDs for $15 because he knows his fans can already get his music for free on P2P networks. Rather than gripe about it, he uses that industry shift to his advantage by giving away his music for free and the only "payment" he asks for is a fan's email. That may not sound like such a great deal for Reznor but consider how clever that as a way to stay in contact with fans. No record label has standardized this approach yet for CD purchases... and they wonder why their business is hurting.

Offering great content for the price of contact information is called an "ethical bribe". Fans get your music, you get to contact them about upcoming concerts, new products in your store, etc. For instance, Reznor created a ultra deluxe limited edition 4 disc collection of his music (a product he already gives away for free) and sold each copy for $300 to his first 2,500 fans. The limited edition is swanky, including three embossed fabric-bound hardcover books, a data DVD of the multi track recording sessions, etc... and it sold out in days. Reznor grossed $750,000 from a product he already gives away for free. How? Because he's collecting emails. Because he's selling something scarce. Because he's giving away his digital products. Because he's connecting with fans and giving them a reason to buy. Still not convinced? Read the story of Amanda Palmer who made $19,000 in less than a month simply using Twitter to connect with her fans.

The trick with independent films is straightfoward—to give fans a reason to buy, you need to offer them value. But how do you create value when art is so subjective? Nobody could have predicted Slumdog Millionaire would win an Oscar for best picture. A dramatic feature about extreme poverty in India's slums? No way. Boyle's films are not your standard fare for studio films... Trainspotting has some "page killer" scenes which no Hollywood studio would have ever dared to film. However, because Slumdog won an Oscar and did so well at the box office, it is—by many earmarks, an independent picture with a big budget—thus, a commercial film. So how do you slice the pie to figure out what an indie film is and what isn't?

This article is part of a series called The Filmmaker's Roadmap to Value. You may read the entire articles by clicking here, or the other articles here: